By acquiring startups that specialize in social media management, Oracle and Salesforce.com have given businesses...
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
ample incentive to look at the integration between social media platforms and CRM themselves, several analysts say.
On Monday, Salesforce.com purchased Buddy Media, a social marketing platform, for $689 million. The deal gives Salesforce.com a one-two punch in the social arena with last year's acquisition of social listening platform Radian6.
Oracle quickly countered, buying social intelligence firm Collective Intellect for an undisclosed sum Tuesday, just two weeks after purchasing the social marketing and engagement platform Vitrue for a reported $300 million.
For more on social media
Find out howsocial media and e-commerce are driving CRM
The acquisitions, coupled with Salesforce.com’s and Oracle's footprints in the CRM market, could convince reluctant organizations to finally filter and analyze the trove of social media data available to them, according to industry observers. But how the two companies integrate the social media platforms and their CRM products remains to be seen.
What’s next for social CRM software?
The new offerings should push some businesses into recognizing they need to analyze their customers’ social postings and then market accordingly, according to Denis Pombriant, founder of Beagle Research Group LLC in Stoughton, Mass. Pombriant wrote about the Buddy Media deal this week.
But don’t expect every business to rush to Oracle, Salesforce.com or any other social platform, said Richard Snow, research director at Ventana Research in San Ramon, Calif. Many businesses feel satisfied with the low-cost marketing of a Facebook page, and it will take a year or two to realize they need to make better use of social media, he said.
Those businesses will recognize Oracle and Salesforce.com sell social “add-ons” to traditional CRM platforms, Snow said. “Companies will sit up and say, ‘OK, I’ve got these tweets and I need to make the most of them. To do that, I need this system, something like the Buddy Media system.’ ”
In fact, the availability of a complementary social platform might convince businesses to invest in a full CRM suite, he said.
Salesforce.com says it will combine Buddy Media -- whose social marketing platform has attracted companies such as L’Oreal, Mattel and Ford -- with the social listening platform of Radian6, enabling its customers to “listen, engage, gain insight, publish, advertise and measure social marketing platforms.”
Until Oracle’s deals with Collective Intellect and Vitrue are finalized later this year, the companies will continue to operate independently. But as with Salesforce.com, Oracle promotes a fuller social media management experience. The two platforms will allow users to engage with customers across all social channels, conduct target marketing and improve customer service, according to Oracle.
Oracle needed to catch up to Salesforce.com’s Radian6, and has done so with Collective Intellect, said Zach Hofer-Shall, an analyst at Forrester Research Inc. in Cambridge, Mass. The two platforms are slightly different, he said. Collective Intellect has “more technology under the hood” for analyzing social media, whereas Radian6 has a niche for collecting and organizing the data. Meanwhile, Vitrue offers much of what Buddy Media does, he said.
But comparing the platforms separately matters less than how they will fit together, especially with existing CRM systems, said Hofer-Shall, who this week wrote about Oracle and Salesforce competing in a social CRM arms race.
“At the end of the day, it’s ‘What will Salesforce do with this? What will Oracle do with this?’ ” he said.
The evolution of social CRM
Adam Sarner, a research director for Gartner Inc. in Stamford, Conn., believes Salesforce.com has created a comprehensive marketing cloud strategy with its two new platforms. “Buddy Media is clearly B2C [business to consumer], and they have nice ties into Radian6. This comes off as kind of the future of social marketing,” he said.
It’s too soon to know where Oracle will take Collective Intellect and Vitrue, but in the meantime, businesses shouldn’t wait too long to take the next step in social media, Sarner said. The sooner they incorporate social media management platforms into their CRM systems, the faster they will jump to the front of the pack, he said.
A business hasn’t fully taken in social media “if you’re constantly saying you’re doing customer relationship management, but doing nothing but spitting out marketing,” Sarner added. Posting marketing messages on social networks or monitoring social without having a follow-up strategy only creates a silo.
The recent acquisitions should nudge businesses into a tighter embrace of social media, the analysts said.
The deals aren't just a consolidation of social CRM, though, Pombriant said.
“What each vendor is telling us is there is a different business model to be accounted for,” Pombriant said. “And that business model is the retailization of CRM, or what you would call the consumer packaged goods approach to CRM.” That approach means analyzing social media to learn exactly what customers want, and then finding a “good, fast, cheap” way to market products to them, he said.
The acquisitions also made good business sense for Oracle and Salesforce.com; it was prudent for them to wait before buying the startups, Hofer-Shall said. “They need this. They needed it for a while,” he said. “Watching the startups do the hard work for them … That’s a smart, safe approach.”